Cloud and the broker CIO. A discussion with Frank DeGilio, Chief Architect for Cloud

A few months ago, Steve Rogers, Director of the IBM Center for Applied Insights, had a great discussion with Frank DiGilio, Distinguished Engineer and Chief Architect for IBM Cloud about how incorporating Cloud as a strategy can give businesses a competitive advantage. Last week we shared their discussion about collaboration. Today, we’re focusing on the CIO.

Steve Rogers: Frank, one of the things in the Global Cloud study was that the pacesetters see Cloud as a key element for competitive advantage. What triggers are causing companies to look at Cloud differently — to look for that competitive advantage versus just an efficiency play?

Frank DeGilio: Well, I believe they’re kind of tied together. In order to compete better, I need to be able to leverage what I do especially well and what other businesses, partners, do especially well, right? So, this is why I believe that the CIO becomes a broker not just a provider of service.

Today, you have a number of business requirements that you’re trying to satisfy, but you have to understand what are the things that I do really well and what are the things that I do that anybody can do? The people who are doing this well are very business savvy and have a technical understanding of the issues. They are able to say, in order to be the best I can possibly be in this space, I need to be able to take my special additive and merge it or marry it with things that I can get publicly.

In some cases, those things are complete services that I just get. For example, one of the businesses that I’ve worked with says, “Why am I in the problem ticketing business? Yes, I have to have a problem ticketing system, but why should I do that? Why shouldn’t I instead devote the staff to do things that allow me to grow, right? Why don’t I just go out and get that as a service from somebody else?”

So, here’s a whole piece of the IT organization that I no longer am wasting time doing. It is something that anybody can do. In the meantime, I have these people focused on how do I provide my business advantage. What do I change in the way I’m dealing with capabilities? What’s going to happen is those people, if they can leverage the right technical capability out in the Cloud , are able to grow the business in an area that they never had time to do before.

And, so, it’s not just about efficiency or saving money. In fact, most people have found that Cloud is not a great way to save money, but Cloud is a great way of leveraging my people in a way that I’ve never been able to do before. Because that is where I’m going to get a lot of the growth and capability.

Steve Rogers: Yes, and building on that… with your client work, how have you seen some of your clients use Cloud’s core strength to achieve some competitive advantage? Do you have any specific examples?

Frank DeGilio: Yes. I was working with a midsize bank — they’re not huge but they’re not small either. The only way that they’re going to distinguish themselves is to provide more differentiated service.

So, how do they do that? Well, they do that by coming up with ways of connecting with social media. They want to be able to understand what their target demographic is into, and they want to be able to leverage that information. They then provide different products to different demographics and they can leverage the social media to understand what they want.

This would be through analytics, in many cases Cloud analytics, in order to do that because there’s no sense in me devoting a whole lot of my infrastructure to do that. Why don’t I mine existing data with a set of computing services that I really don’t need all the time but just need enough to kind of do what we consider big data.

And when people say “big data” what I’m thinking of is a lot of unstructured stuff which is from Twitter or Facebook. Or one of those social media sources tied to what I currently have — my traditional, much more structured data. If I could take that data, put it together, and start doing some processing against that, then I can look for trends and see how those trends measure the capabilities that I currently have or capabilities that I can extend to target that demographic.

That’s what this company is doing. It is saying, I’m going to build out in these little bursty things what I need to solve this problem. And I don’t need to worry about the infrastructure or any of that because I’m not really going to do this a lot or for a long time. I just need to figure this little piece out. So, what they’re doing is finding service providers that can take data or pull data that’s not in house.

What I’m not interested in is the data. What I’m interested in is the information. So, I’ll go out. I’ll have an external service that works with those other external services crunch the data and bring the information back to me.

And that’s the kind of thing that businesses are going to have to do in order to be setting the pace rather than just kind of going along and doing what they’ve been doing forever.

Steve Rogers: Yes. They’re using the information to sharpen their segmentation and their appeal to customers.